EconomyFinancialAre Toyota hybrids falling behind? The Japanese brand opted...

Are Toyota hybrids falling behind? The Japanese brand opted for this technology, but electric cars are advancing fast in the world

The Toyota Prius was a milestone on the road to electric mobility. Since its launch in 1997, it has attracted millions of buyers around the world, who wanted to do their bit in reducing emissions while saving money on gasoline, thanks to the efficiency allowed by its small lithium battery in conjunction with its engine. .

In the decades that followed, and as new environmental regulations emerged and emissions limits for vehicles tightened, Toyota bet on hybrid cars in the short term while advancing the development of hydrogen fuel cells. But this technology, once an alternative to lithium batteries, has now been left behind as most manufacturers have gone the electric route.

That means an accelerated migration from gasoline engines to electric on the roads – which is just what several governments are seeking in order to meet their environmental commitments – could be a huge blow to market share and financial performance. of the Japanese manufacturer, the largest seller of cars in the world.

Today Toyota has about 85% of the hybrid market in Mexico and until now it has not missed an electric model in its range to remain among the five best-selling brands in the country. In 2021, it sold some 25,897 hybrid vehicles, equivalent to 28% of its sales. The proportion is higher at its premium brand, Lexus, where about half of the nearly 500 units sold are hybrid models. “And what we lack,” said Guillermo Díaz, president of Toyota Motors Sales and Lexus de México, who showed that new hybrid variants could soon be incorporated into its product range.

But even the Mexican government, which has made a strong push for fossil fuels in recent years, has begun to draw distinctions between different levels of electrification. In 2020, the Secretariat of the Environment of Mexico City (Sedema) made a reorganization in the Metropolitan Zone of the Valley of Mexico, leaving 100% electric vehicles as the only ones that can maintain it regardless of its model year.

The era of hybrids, close to ending in Mexico?

The Toyota Prius, with a disruptive design, arrived in Mexico in 2010. But it was not until 2014 that it began to make noise in the Mexican market. “We practically relaunched it that year. We made a lot of investment in time and money to train the entire network of distributors, as if it had arrived new,” says Díaz.

He, who was then the director of operations for Toyota in Mexico, was one of the promoters of technology in the country, despite the fact that a decade ago doubts about battery-powered cars were still great, not only among consumers, but also between dealers and brand executives themselves.

But after training its dealer network so dealers could convey the benefits of the technology to customers, and intensifying marketing and communications efforts to amplify the message, Prius sales topped 100 units a year in 2010. to 7,000 in 2016.

Mexico was positioned as the third market where more Priuses were sold worldwide, after Japan and the United States. Reaching this volume allowed the Mexican subsidiary to attract the attention of the corporation and achieve the allocation of more units, both Prius and other hybrid models.

Today the brand markets five hybrids in the country: Prius, RAV-4, Corolla, Camry and Sienna. The latter, a minivan, is now only offered with a hybrid engine.

Today this type of model, of which Toyota has sold just over 90,000, continues to be a technology highly demanded by the Mexican market. “Even if we had more units available, we will sell more,” said Díaz, who assured that the fact that hybrids can only obtain the exempt hologram for eight years, without the possibility of renewing it, has not affected the sales of the five Toyota models.

But Díaz also admits that “The electrification strategy is very important and eventually we will get there.”

The corporation announced at the end of 2021, the construction of a new battery plant of 1,290 million dollars in North Carolina, in the United States. The new complex will start operations in 2025 and will initially be capable of supplying lithium-ion batteries for 800,000 vehicles a year. “It will pave the way for Toyota electric vehicle production in the United States,” Chris Reynolds, executive vice president of Toyota Motor North America, said in a statement.

EV shipments in the US market soared 60% in the first quarter of 2022, after a decade of slow but steady sales growth for battery-powered models. The big winners were electric vehicles from Tesla (placed grew 59% to 113,882 in the first quarter of the year), Kia (800% more to 8,450), Ford (91% more to 7,407) and Hyundai (300% more, up to 6,964), according to data from the specialized site of the Automotive News sector. The Nissan Leaf and Volkswagen ID.4 models were also among the 10 most placed in the period.

As the Japanese giant advances to expand its production of electric vehicles globally and strengthens itself as a competitor to Tesla, Hyundai and Volkswagen , the Mexican subsidiary will maintain its commitment to hybrids.

“We think that the way to get there is not to go directly from an internal combustion engine to an electric motor. We think that the best strategy is a gradual transition,” Diaz concluded.

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